Saturday, October 27, 2012

Signs Zeek was a Sleazeball all along

Here's a 14-point sleazeball checklist from Psychology Today:

It's AMAZING how many of them applies to Zeek Rewards and their lousy PR machine.

"But My Intentions Are Good. Donʼt They Count For Everything?"  
"I never said I was perfect!" 

It's absolutely amazing that how many Zeek defenders were out there claiming Paul R. Burks, leader of Zeek Rewards Ponzi, had the best of intentions for everybody. Here's one such response:

Note that this is the day AFTER Zeek got shut down. She even claimed that Burks never said he was perfect, but she trusts in him completely.

But wait, there's more!

Friday, October 26, 2012

Why do so many MLMers completely ignore the LAW?

It is absolutely amazing to me, at least, how perfectly reasonable people completely IGNORE the law when it comes to MLM / network marketing.

By definition, MLM is just a hair away from being a pyramid scheme (go look up FTC vs. Koscot and FTC vs. Amway), yet when most MLMers talk, they do NOT know the difference between pyramid scheme vs. MLM, or they can only quote Wikipedia or some other network marketer's abbreviated version, with out understanding the actual differences.

Here's one example, from a "David Cant", who claims to be Internet marketer out of Australia. On his "About Pyramids and Ponzis" webpage, he wrote:

In both definition of Ponzi scheme and Pyramid scheme, he merely copied Wikipedia, without any understanding of the why, or even cite any laws. He doesn't know the difference between pyramid-shaped organization vs. pyramid scheme.

He is supposedly trying to demonstrate his knowledge. He is instead showing off his ignorance, and revel in it. He doesn't want to know what the law actually says. Apparently, it's not relevant.

Thursday, October 25, 2012

You are all sheeple, until you choose not to be

XKCD: Sheeple
(Photo credit: Adam Crowe)
The term "sheeple" is defined as:
term of disparagement in which people are likened to sheep, a herd animal. The term is used to describe those who voluntarily acquiesce to a suggestion without critical analysis or research. By doing so, they undermine their own individuality and may willingly give up their rights.

In scams, most victims are sheeple, who basically was told "shut up and fall in line", and they simply followed orders, instead of objecting.

Yet each of them thinks that they are better than mere sheeple.

Honest truth: you are *all* sheeple when some psychopath appear in front of you and "lead" you, and you all just fall into the herd and go along, even when you are asked to do "evil" things, simply because someone asked you to.

Stanley Milgram setup a psychological experiment back in 1961 to test how deep is our morals: will we cause hurt to other people just because we don't feel "responsible"? The experiment is simple. The subject, A, was given the role as "teacher". A was told that A is there to give "punishment" to the other test subject B (who's actually part of the experiment staff, an actor) who goes into a separate room. B is supposed to choose the right word association when given a word as prompt. If B got it wrong, A is supposed to push a button that administer an electric shock to B. (In reality, there is no shock.) B will react to the "shock" via microphone, and subsequent wrong answers will cause the voltage to be increased by 15 volts, and B will eventually bang on the wall, claim to have a heart condition, and go silent (all part of the act). The shock ends when 450V was "administered" 3 times, or subject A refuses to continue the test even when verbally "prod-ed" multiple times. The test is for A, to see how far he will go, when he was simply ORDERED to continue, and/or told he would NOT be held responsible.

Before the experiment, most people believed that virtually no one will go all the way, and most people would stop by 300 volts. The actual result was extremely surprising: 26 out of 40 people tested went all the way to "administer" 450V shock three times. They all acted as if they are in physical distress himself, like sweating, fingernail chewing, and so on, but they all pushed the button when verbally ordered to do so.

[ Read more about the Milgram experiment ]

In other words, you all can be asked to do evil things, as long as you are quite sure you will not be held responsible.

And the scammers know that.

Wednesday, October 24, 2012

MLM Basics: Inventory Loading, and front-loading

Seal of the United States Federal Trade Commis...
Seal of the United States
Federal Trade Commission.
(Photo credit: Wikipedia)
"The MLM Attorney" Kevin Thompson wrote a very good piece on the problem of "front-loading" and "inventory loading" in MLM. (IMHO, he should write more often, but he seems to do it only once a month, must be all that lawyer stuff that kept him busy)

Mr. Thompson and I actually do think a lot alike, as I have covered this very topic in two other blog posts here

What is Inventory Loading (and why you should care)


Danger of a Large Starter Kit

A large starter kit is front-loading, i.e. entice / force / encourage the new affiliate to buy more inventory (probably more than what s/he can sell in the near future), merely to stay qualified for either bonuses, or to a rank which entitles them for higher payout levels.

And FTC frowns upon this sort of practice, because it's a sign that the business is really a pyramid scheme.

Tuesday, October 23, 2012

"High Def Nation" MLM pulled plug before launch (UPDATE: they're baaaack!)

High Def Nation was supposedly founded by 4 MLM veterans that plans to sell health plans via MLM.

BehindMLM published a review of HDN on October 16th, linking it to AWIS (not insurance)

I published a review on October 17th, looking into ownership of AWIS and related entities, and how HDN members are recruited. My conclusion is the offering is... suspicious (NOT insurance), and HDN's comp plan is very likely a pyramid scheme as it offers pay on recruitment.

On October 19th, High Def Nation's "provider" AWIS chose to sever all relations with HDN.

On October 23rd the HDN website no longer exists. It's now a parked domain.

EDIT: On October 24th, HDN revised their entire website, and no longer mentions what it does, only that it will launch on November 1st, 2012.

Bad Argument: The "Character Witness" defense

Red Herring
Red Herring (Photo credit: buchino)
When defenders of a suspect scheme sincerely believes they are not involved in a scam, but cannot defeat your logically sound, properly cited arguments that the scheme is illegal based on current laws, they will often fall back to what I call the "character witness defense".  (There are other responses, such as "You don't know what you're talking about", "Wikipedia defense", strawman, and many other tactics, but that's not the focus of this post)

Essentially, the defender ignores the evidence that would have confirmed the potential guilt, and basically makes the argument from the "character witness" standpoint, like "I knew it's a good biz, it had improved the lives of many, it donated to charities..."

However, this is, as you may have already guessed, red herring.  In fact, character evidence is usually NOT admissible in civil trial court. 

When done in defense of a suspect scheme (often, the scheme has legal products, but was sold via an illegal sales scheme such as pyramid scheme or ponzi scheme or hybrid of both), the defenders make arguments that fall into 3 general categories: good product, we paid people, and people love us. None of which has to do with the business model itself, the point of contention.

Monday, October 22, 2012

How a meme gets into your head

Cover of "Total Recall"
Cover of Total Recall
No, this is not "Total Recall" (or Rekall, if you insist) sci-fi universe, and yes, false memory *can* be planted in many people's minds. It's called "repressed memory".

In the 1990's, Dr. Elizabeth Loftus was one of the top experts on "false memories". In most cases, all it takes is a couple fake photos and fake news items. By showing you some fake photos, you'll probably believe something happened, when it didn't. At least 30% of you will claim to have memories of this actually happening.

Slate actually ran an experiment in 2010... They Photoshop'ed (tm) a few fake photos (such as... US president Barack Obama shaking hands with Iranian president Ahmedinhjad, which never happened), and showed it to over 5000 people. Results are surprising... most can't pick out the fake events from the real ones, even when told at least one of them is fake!

Furthermore, you can easily "coach" someone into adding something into their memory that *could* have happened, but didn't, and convince them it did. Dr. Loftus had an experiment in the 1990's where one student's brother convinced the student that he once was lost in the mall when he was a child. He was very sincere and believed it happened. But it never did happen. The memory was planted, and the mind filled in the rest of the details. This basically proved that "repressed memories", like the case where the girl claimed her father had murdered her best childhood friend, may have been "coached" (whether deliberately or accidentally) by the interviewer / hypnotist who helped the "recovery" of such memories.

By sketching the events, and act confidently, the scammers can convince their victims to believe that certain things never happened (but did) or vice versa, that things did happen (but actually didn't).

Sunday, October 21, 2012

Bad Argument: Appeal to Unverified Authority

One of the frequent mistakes committed by "defenders" of opportunities is "Appeal to unverified authority", where they simply cited an expert / authority, without checking that expert's credentials.

"Appeal to unverified authority" is a variant of "Appeal to Authority" and its relative, "Appeal to Inappropriate authority".

[ Read why experts can fail, and often do ]

Here's a perfect example:

We were discussing Stemtech on Behindmlm. Stemtech sells nutritional supplements that they claim will make your body produce more stem cells, thus improve your health. I checked major medical websites and medical research websites such as Mayo Clinic, and there is NOTHING, virtually NO research, much less any PROOF, that any sort of nutritional supplements can stimulate the human body into making more stem cells.

But that's not the problem. As you can see, this "Sharma" guy just claimed that Dr. Somersall is a doctor, and he has good insights about StemTech products (and everybody else knows nothing).

So who's this Dr. Somersall any way? Let's do some fact-checking.